August 4, 2010

Amarillo Biosciences (OTC-BB: AMAR) Revamps Interferon Technology

By Justin Kuepper on Wednesday, August 4th, 2010

Amarillo Biosciences, Inc. (AMAR), a biotech firm focused on using natural human interferon alpha administered in low doses, is targeting diseases similar to those targeted by companies like InterMune, Inc. (ITMN) and Amgen, Inc. (AMGN). Amar is seeking to install a paradigm shift in how interferon is used to treat disease.

Amarillo Biosciences, Inc. (OTC-BB: AMAR) is a biotechnology company focused on using natural human interferon alpha in low doses to target diseases including influenza, hepatitis C and chronic cough in COPD among others.

Amarillo Improves the Age-Old Interferon Therapy

First developed in the early 1980’s, interferon is a protein that is made and released by all nucleotide cells but particularly lymphocytes in response to the presence of pathogens – like viruses, bacteria, or tumor cells. The protein enables communication between cells in order to trigger the immune system to act and eliminate the threat. Currently, three major types of these proteins are being used to combat a number of diseases and disorders, including leukemia.

These same proteins have always existed in the nasal cavity, where it is released in small doses to stimulate the immune system when someone inhales a virus. While traditional interferon usage has focused on higher doses with significant side effects Amarillo Biosciences is focused on using low doses that are without side effects. Moreover, the company’s product is stable at room temperatures, less expensive, and easier to dose without a needle.

Several studies around the world have also confirmed the effectiveness of the treatment. CytoPharm, which licensed the drug in Taiwan and China, isconducting a US FDA and Taiwanese regulatory-approved Phase II trial on 165 hepatitis C patients. The full results aren’t expected until the end of 2010.

Hot and Growing End Markets of Utmost Importance

Amarillo Biosciences is initially focused on three markets, including influenza, hepatitis C and chronic cough (COPD), that represent a combined hundreds of millions of patients and hundreds of millions of dollars in revenues. It is this wide reach that could make the company’s drugs “blockbuster” status and make the company appealing to a variety of possible suitors.

For instance, the importance of effective flu treatments is difficult to overstate after the outbreak in 2008 and 2009. In the US alone, there are an estimated 25-50 million cases of the flu each year, which lead up to 150,000 hospitalizations and 30,000-40,000 deaths annually, according to data from Genentech, Inc. Extrapolated to the worldwide population, the flu is estimated to infect more than a billion people worldwide each year.

Hepatitis C is another condition that affects approximately 3.9 million people in the US and 300 million people worldwide, according to Clinaero, Inc. While the immune system can handle 15% of these cases, the remaining 85% of infected people need to be treated to fully rid of the disease, and many patients can end up having long-term liver infection – otherwise known as chronic hepatitis C – leading sometimes to Cancer.

Finally, chronic cough, or COPD, affects nearly 15 – 20 million US adults and is the fourth leading cause of death in the US. Meanwhile, the World Health Organization estimates that some 2.74 million people die of COPD every year worldwide, making it the 4th leading cause of death next to diseases like HIV/AIDS and coronary heart disease.

Dedication to Unlocking Shareholder Value

Amarillo Biosciences may be diligently working towards development of its revolutionary treatment, but it is also working diligently to maintain and unlock shareholder value. By developing a dietary supplement, MAXISAL(R), to address the market immediately and generate revenues, while negotiating to obtain a commercialization partner willing to pay upfront milestones, the company is hoping to avoid raising debt or equity that it doesn’t need.

Meanwhile, Amarillo’s low-dose oral interferon could represent a significant opportunity for shareholders down the road. With Phase II studies already underway, along with talks with potential partners, this stock could see some significant upside over the near-term.


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